New data shows the dramatic rises in Internet traffic generated by the spread of the new coronavirus are beginning to taper off. As a result, network operators are beginning to come to grips with new levels of "normal" traffic – a situation that could bode well for some equipment suppliers.
"We have seen the stabilization of peak demand – with manageable traffic growth (unlike 40-50% growth we saw earlier)," wrote Nokia's Craig Labovitz, head of the company's Deepfield portfolio of network intelligence, analytics and security products, a position he said gives him a view directly into global Internet network performance. "Generally, we see 'flattening' of traffic curves – as opposed to spikes initially seen after lockdowns – due to continued and high traffic levels during the business hours (mostly driven by conferencing applications). Similar flattening – on a much higher level of bandwidth – is happening on the weekends (driven by video streaming)."
Labovitz wrote that the biggest increases in traffic recorded by Nokia have come from the videoconferencing sector, especially Zoom, which he said grew 700% from February 1 in select networks in the US.
Interestingly, Labovitz also noted that Netflix, YouTube and Amazon Prime have indeed reduced their bit rates in Europe, as they said they would, in order to reduce network congestion. However, he reported that the new Disney+ streaming service, launched March 24 in some European countries, does not appear to be streaming at a reduced bit rate.
"In some European networks, Disney+ now represents about 8% of total SVOD [streaming video on demand] traffic but about 18% of SVOD-related peering traffic," Labovitz wrote. "It is interesting to see that Disney+ uses six different CDNs [content delivery networks] to get their content to subscribers and has the potential to cause traffic shifts (as CDN providers balance their traffic)."
From Trump to CenturyLink
Nokia of course isn't the only company tracking how stay-at-home efforts are impacting network traffic. A wide range of other Internet service providers, network-monitoring companies and others have reported similar numbers.
Indeed, the topic recently rose to the highest levels of the US government, with President Trump hosting a conference call with executives from US network operators including AT&T, Verizon, Charter Communications, Altice USA and others on the matter.
According to Reuters, Trump thanked the firms "for not only rising to the increased demand, but extending services to all Americans at no additional cost and for waiving bills and late fees for those experiencing financial hardship."
New COVID-19 traffic figures are still rolling in from network operators of all sizes and shapes. For example, CenturyLink – the third-biggest phone company in the US, according to Leichtman Research Group – reported 35% growth in Internet traffic on its network during the past two weeks, with gaming and video being the two largest contributors, respectively.
"We expected an increase in internet traffic and were prepared," said Andrew Dugan, CenturyLink's CTO, in a statement. "We are staying ahead of this growth because our network was designed to quickly scale up and down, allowing us to adjust traffic and make changes based on our customers' fluctuating needs."
Ciena and Juniper could benefit
The effects of all these increases in traffic could have significant implications for telecom equipment vendors, according to the analysts at Wall Street research firm Jefferies. "Telecom networks are engineered with peak busy hour traffic loads in mind," the analysts wrote in a note to investors Wednesday. "Also, network engineers typically design in another 20-50% in additional traffic overhead into their network designs. As such, the additional WFH [work from home] traffic – combined with changing peak busy hour trends – should help consume excess capacity in these networks and drive incremental equipment demand."
The firm's analysts said they believe operators will invest in three specific areas in response to the growth of traffic on their networks:
- metro area networks
- broadband aggregation networks
- peering/connectivity with Internet content providers
The analysts said they expect vendors Ciena and Juniper to be some of the primary beneficiaries of these investments.
— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano
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April 02, 2020 at 11:10PM
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COVID-19-driven network traffic shows signs of stabilizing - Light Reading
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